Pfizer Inc.'s research setback sparks acquisition speculation, new weight loss drug newcomer's stock price surges.

Pfizer Inc. (PFE.US) has stopped the development of the highly anticipated oral weight loss drug Danuglipron, and investors are betting that this setback could stimulate Pfizer Inc. to seek acquisition deals. Several biotechnology companies that develop weight loss drugs saw their stock prices rise on Monday. Viking Therapeutics (VKTX.US) rose nearly 11%, GPCR (GPCR.US) rose about 19%, Terns Pharmaceuticals (TERN.US) rose 8%, and Metsera (MTSR.US) soared approximately 30%. Gabelli Funds portfolio manager Jeff Jonas stated, "Will Pfizer Inc. acquire Viking or other companies? I think this is the reason why the stock prices of these companies have risen significantly." Pfizer Inc. previously announced that it would stop the development of the highly anticipated oral weight loss drug Danuglipron because a patient participating in a clinical trial experienced potential drug-induced liver injury. Pfizer Inc. has been trying to compete in the weight loss treatment market with Novo Nordisk A/S Sponsored ADR Class B (NVO.US) and Eli Lilly (LLY.US), but the company has fallen behind its competitors in developing weight loss drugs. The termination of the development of Danuglipron may leave a gap in Pfizer Inc.'s product portfolio. Meanwhile, executives have stated that Pfizer Inc. has up to $15 billion available for future transactions. Bloomberg Intelligence analysts John Murphy and Michael Shah stated, "Pfizer Inc. may turn to external innovation as acquiring another GLP-1 drug - Viking, GPCR, and Terns' drugs - could be strategically important." This year, Viking is advancing late-stage trials of its experimental drug VK2735, while GPCR's aleniglipron is undergoing mid-stage trials. Metsera's candidate drug is in phase 1 and phase 2 studies, and Terns has stated that it will advance its TERN-601 to phase 2 trials this year. Small drug developers often collaborate with large pharmaceutical companies as their assets approach the commercialization stage. Such collaborations are especially likely in the weight loss drug market, as there is a strong demand for weight loss drugs from patients, and new entrants need to compete with large pharmaceutical companies like Novo Nordisk A/S Sponsored ADR Class B and Eli Lilly.